According to a lenders group, the Council of Mortgage Lenders (CML), mortgage lenders have less money to lend out on mortgages and if the government does not intervene, then the situation is unlikely to improve in 2009.

The CML’s Director General, Michael Coogan, said:

“Consumer borrowing will simply not return to the levels seen in 2007, even if funds increased and a wide variety of lenders were to become active in the mortgage market again.  In fact, unless government takes further targeted action to help market participants, we will see a worsening of the picture next year compared to this.”

Some lenders, like the Royal Bank of Scotland, have offered help or agreed to give a little respite to borrowers experiencing trouble with their mortgage and Coogan welcomed this, although he has gone further to request that the government offers some sort of backstop scheme, which would allow borrowers to sell their house to their mortgage lender and rent it back – a move that would help borrowers remain in their homes.

Whether or not this happens, it would be important that the mortgage lenders do not pressurise borrowers into this move either.

The entire mortgage industry needs to work hard next year to restore faith in the system and in mortgage lending, so that mortgage advisors and those seeking CeMAP training so that they can take advantage of the expected upturn in the next year or two will be able to help first time buyers get on the property ladder and help existing borrowers stay in their homes.

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